Delayed Proof of Work (dPoW)

Delayed Proof of Work (dPoW) is a hybrid consensus method that allows one blockchain to take advantage of the security provided through the hashing power of a secondary blockchain. This is achieved through a group of notary nodes that add data from the first blockchain onto the second, which would then require both blockchains to be compromised to undermine the security of the first. The first to make use of this consensus method is Komodo, which is attached to the Bitcoin blockchain.

Delayed Proof of Work Details

The blockchain relying on dPoW can make use of either the Proof of Work (PoW) or Proof of Stake (PoS) consensus methods to function; and it can attach itself to any PoW blockchain desired. However, Bitcoin's hash rate currently provides the greatest level of security to blockchains being secured by dPoW. The illustration below shows the relationship of individual records to the primary blockchain and its attached PoW blockchain:

There are two types of nodes within a dPoW system: notary nodes and normal nodes. The 64 notary nodes are elected by dPoW blockchain stakeholders to add (notarize) confirmed blocks from the dPoW blockchain onto the attached PoW blockchain. Once a block has been completed, its hash is added to a Bitcoin transaction signed by 33 of the notary nodes, creating a record of dPoW block hashes on the Bitcoin blockchain that have been notarized by a majority of the network’s notary nodes.

Network Efficiency

To prevent mining wars between notary nodes, which would reduce the network’s efficiency, Komodo has devised a round-robin method of mining that operates on two modes. The “No Notary” mode allows for all network nodes to mine blocks, similar to a traditional PoW consensus mechanism; however, under “Notaries Active” mode, the network notaries will mine at a significantly reduced network difficulty rate. Within this scheme, each notary is allowed to mine one block at its current difficulty rate, while the other notary nodes must mine at 10 time higher and all the normal nodes will always mine at 100 times the difficulty rate of the notary nodes.

Graceful Degradation

The dPoW system is designed to allow the blockchain to continue functioning without the notary nodes. In such a situation, the dPoW blockchain can continue operating based upon its initial consensus method; however, it would no longer have the added security of the attached blockchain. This method of consensus architecture, illustrated below with a PoW initial consensus method, allows for decentralized creation of blocks independent of the notary nodes, while still allowing for previously notarized blocks to enjoy the security of the attached blockchain.

Benefits

Delayed Proof of Work, then, allows for increased security and reduced energy usage for any blockchain making use of this consensus method. For example, as Komodo uses the Equihash hashing algorithm to prevent mining with ASICs and it relies upon a round-robin method of mining for notary nodes, incentives are structured to reduce the possibility that competition between nodes will lead to excessive use of energy or computing power.

In addition, a dPoW blockchain such as Komodo can add value to other blockchains by indirectly providing Bitcoin security without paying the cost of Bitcoin transactions: A third blockchain using dPoW can attach itself to Komodo, which is subsequently attached to Bitcoin. In this way, dPoW blockchains can benefit from Bitcoin’s high hash rate without having to be directly attached to the Bitcoin blockchain.

Finally, the separated functions of notary nodes and normal nodes within the system ensure that the initial consensus mechanism continues to operate in the event that the notary nodes fail. This interdependence creates an incentive for other networks to support the continued maintenance of the Bitcoin network without becoming entirely reliant upon its direct functionality.